Why Virgin Galactic Stock Just Crashed 14%
Two months ago, Virgin Galactic (NYSE: SPCE) stock crashed after the company told investors it planned a reverse stock split after holding its June 12 shareholders meeting.
It's June 13 today, and Virgin Galactic has gone ahead with its plan. Last night after close of trading, management confirmed it will reverse split its stock 1-for-20. As of 12:15 p.m. ET today, Virgin Galactic stock is down 13.7%.
The opposite of an ordinary stock split (where one share becomes several shares), Virgin Galactic's reverse share split will glue together 20 current shares into one single share -- starting right after close of trading on Friday. By the time investors wake up Monday, for every 1,000 shares of stock they thought they owned, they'll discover they actually own only 50.
Source Fool.com
